Municipal and School Audits released by New York State Comptroller

On August 11, 2023 New York State Comptroller Thomas P. DiNapoli announced the following local government and school audits were issued.

 

Click on the text highlighted in color to access the complete audit report

 

Town of Ticonderoga – Capital Project Management (Essex County)

The board did not provide adequate oversight and management of capital projects. Town officials did not monitor activity for eight projects reviewed (with board-authorized budgets totaling $20.8 million) to ensure that costs were kept within the authorized budget. In addition, budget modifications totaling $3.2 million were not recorded in the accounting records.

 

Town of White Creek – Disbursements and Annual Financial Reports (Washington County)

The supervisor did not provide proper oversight of disbursements or ensure the required annual update documents (AUD) were filed in a timely manner. Auditors reviewed 199 disbursements totaling $516,716 and determined the supervisor did not review any of the disbursements to ensure they were accurate and made for appropriate purposes and did not authorize the 44 electronic fund transfers or sign the 155 checks. Instead of signing the checks, a rubber signature stamp was used, which is not permitted. The supervisor also did not review canceled check images to ensure they agreed to the board-approved abstract.

 

Brocton Central School District – Financial Management (Chautauqua County)

The board and district officials did not properly manage fund balance and reserves. The board and officials overestimated budgetary appropriations by an annual average of $1.3 million (8%) and allowed surplus fund balance to exceed the statutory limit as of June 30, 2022 by 7 percentage points, or $1.2 million. They also could not demonstrate that six reserves with balances totaling more than $2.2 million were funded or used as management intended and did not establish an adequate reserve fund policy or develop annual reserve reports.

 

Clarendon Fire Company – Financial Activities (Orleans County)

The treasurer did not provide the board with sufficient information to monitor the company’s financial activity and company officials did not always provide the treasurer with sufficient information to record financial transactions. The treasurer was not trained or made aware of his financial reporting duties and requirements. Officials also did not maintain adequate supporting documentation for cash receipts, and fundraising cash receipts, totaling $86,208, were not reported to the board, as required. Auditors found credit card payments, totaling $24,552, that were not properly supported, recorded, or reported and the treasurer paid credit card bills late. As a result, the company incurred late fees and interest charges, totaling $1,157.

 

Brocton Central School District – Claims Audit (Chatauqua County)

Auditors found that claims were not properly audited before payment. As a result, there was an increased risk that improper or unsupported payments could have been made and may not have been detected and corrected. The board did not provide the claims auditor with adequate guidance to perform her duties, leading auditors to find that of the 184 claims reviewed totaling $1.9 million, 100 claims totaling approximately $141,000 should not have been approved for payment because they had one or more exceptions.

 

Morris Central School District – Fund Balance Management (Otsego County)

The board and district officials did not effectively manage the district’s fund balance. The board overestimated appropriations from the 2019-20 through 2021-22 fiscal years by an average of $617,000, or 6%. In addition, surplus fund balance exceeded the 4% statutory limit in all three fiscal years by approximately $1.1 million (10.1 percentage points) to $2 million (21 percentage points) and four of the district’s 10 reserves were not reasonably funded, or used to pay related expenditures, during the three fiscal years. For example, the balance of $508,923 in the retirement contribution for employees reserve was sufficient to cover expenditures for at least four years.

 

Village of Canaseraga – Claims Audit (Allegany County)

Although the 300 claims auditors reviewed were for appropriate village purposes, certain claims were not adequately supported or properly audited and approved before payment. Of the 300 claims reviewed totaling approximately $758,000, 205 (68%) claims totaling approximately $656,000 had one or more exceptions and should not have been approved for payment. Auditors found that: claims totaling approximately $588,000 were paid without evidence of being audited or reviewed by the board, claims totaling approximately $114,000 were paid prior to scheduled monthly board meetings and were not audited prior to payment, claims totaling approximately $24,000 did not have departmental approval, and 20 claims totaling approximately $4,400 were not mathematically accurate when paid. In addition, board members did not know what their claims audit responsibilities were, nor did they take training to learn what their claims audit responsibilities were.

 

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Timely filing of the required written notice of the incident underlying a claim for disability retirement benefits critical to establishing eligibility for benefits

A police office [Petitioner] filed applications for performance of duty and accidental disability retirement benefits in April 2019 based upon two separate incidents that occurred in August 2014 and January 2017, respectively.

The New York State and Local Retirement System [NYSLRS] initially denied the applications and Petitioner sought a hearing and a redetermination. Following a hearing, the Hearing Officer upheld the denials upon, among other grounds, Petitioner's failure to provide proper notice of an alleged disability as to both incidents. The New York State Comptroller upheld the Hearing Officer's decision and Petitioner initiated a CPLR Article 78 proceeding challenging the State Comptroller ruling.

The Appellate Division sustained the Comptroller determination noting that "To be eligible for performance of duty and accidental disability retirement benefits, petitioner was required to file written notice with respondent within 90 days after each of the incidents upon which his alleged disabilities are based; the notice must include the date, time and place of the occurrence and the nature of the injuries and the alleged disability.*

As to the 2014 incident, Petitioner testified at the hearing that he orally advised his supervisors of the incident immediately after it occurred but did not dispute that he failed to timely provide written notice of the incident as is required.

The Appellate Division said it agree that Petitioner has not demonstrated good cause for his failure in this regard so as to trigger an exception to the notice requirement.

With respect to the 2017 incident, Petitioner relied on the exception to the notice requirement applies because the accident and his related injuries are the subject of a Workers' Compensation claim. However, noted the Appellate Division, "... [Petitioner] did not file his written claim for workers' compensation benefits within the 30-day period provided by Workers' Compensation Law §18. And although "notice of the incident was filed with the Workers' Compensation Board, it was not filed in accordance with the provisions of Workers' Compensation Law §18, requiring that written notice be given to the employer within 30 days after the accident."

Also, the Appellate Division opined, the Workers' Compensation Board may have been justified in excusing this defect, "that decision is not binding upon [NYSLRS] and does not preclude the denial of [Petitioner's] retirement applications.

In any event, the Appellate Division said it agreed with NYSLRS that a "notation by [Petitioner's] employer on the report is insufficient to meet [Petitioner's] burden of proof and establish that he provided signed written notice setting forth the particulars of his accident and injury to his employer within the required time frame".

In the words of the court: "As [Petitioner] failed to establish that he complied with the applicable notice requirements for either incident, and given that he cannot avail himself of the exceptions thereto, his applications were properly denied".

* See Retirement and Social Security Law §§363[c][a]; 363-c[e][a]). The decision notes that Retirement and Social Security Law §§363 and 363-c provide exceptions to this notice requirement where, as is relevant here, notice of the accident has been filed "in accordance with the provisions of the Workers' Compensation Law or for "good cause shown as provided by [[NYSLRS's] rules and regulations" (Retirement and Social Security Law §§363[c][b]; 363-c[e][b]).

Click HERE to access the Appellate Division's decision posted on the Internet.

 

 

Teacher charged with stealing over $4,000 from CiTi BOCES

In what appears to be another case of "jobbery" -- Jobbery is defined by Mirriam-Webster as "the improper use of public office or conduct of public business for private gain" -- on August 10, 2023, State Comptroller Thomas P. DiNapoli, Oswego County District Attorney Gregory S. Oakes, and State Police Acting Superintendent Steven Nigrelli announced that Oswego County adult literacy teacher William Fisher was charged with falsifying his timesheets to steal more than $4,000 from his employer, the Center for Instruction Technology and Innovation (CiTi) BOCES. 

“William Fisher was supposed to help adults earn their GED and open a path to greater opportunities, but instead falsified timesheets to line his own pockets,” DiNapoli said. “Thanks to my partnership with District Attorney Oakes and the New York State Police, he will be held accountable.”

New York State Police Acting Superintendent Steven A. Nigrelli said, “I thank our State Police members and partners from the State Comptroller’s Office and Oswego County District Attorney’s Office for their collaborative work on this investigation. Mr. Fisher was placed into a position of leadership and trust by his employer and students. For his own advantage, he chose to use that trust to falsify timesheets for personal financial gain. The New York State Police will remain vigilant in ceasing public corruption and those who use their position to take advantage of others.”

Fisher worked for CiTi BOCES in the town of Mexico, NY. During an internal audit, CiTi BOCES found discrepancies with Fisher’s timesheets. CiTi BOCES reported this to the New York State Police, who in turn, contacted DiNapoli’s office to partner in the investigation.

Fisher, who has been suspended, was required to meet with students for tutoring sessions and provide them with work packets. The investigation found that from January-September of 2022 he did not provide these sessions to at least three students and instead submitted false timesheets to be paid for sessions that never occurred.

He was allegedly paid at least $4,409 that he was not entitled to based upon his deception. During the course of the investigation, Fisher was hired by the Oswego Central School District, but has since been suspended.

Fisher was charged with three counts of Falsifying Business Records, Grand Larceny and Corrupting the Government, all felonies. He was arraigned in Oswego County Centralized Arraignment Part and is due back in court on August 22, 2023.

The charges filed in this case are merely accusations and the defendant is presumed innocent unless and until proven guilty in a court of law.

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Since taking office in 2007, DiNapoli has committed to fighting public corruption and encourages the public to help fight fraud and abuse. New Yorkers can report allegations of fraud involving taxpayer money by calling the Comptroller's toll-free Fraud Hotline at 1-888-672-4555, by filing a complaint online at investigations@osc.ny.gov, or by mailing a complaint to: Office of the State Comptroller, Division of Investigations, 8th Floor, 110 State St., Albany, NY 12236.

 

Concerning an action to recover damages from a co-worker for alleged defamation

The Plaintiff, a tenured professor at a University, commenced this action against the Respondents, including a named professor [Professor] at the University. Plaintiff alleged that Professor defamed him in course of an investigation of Plaintiff conducted by the University and sought damages.

Citing Porges v Weitz, 205 AD3d 13, the Appellate Division said "The elements of a cause of action [to recover damages] for defamation are:

(a) a false statement that tends to expose a person to public contempt, hatred, ridicule, aversion, or disgrace;

(b) published without privilege or authorization to a third party;

(c) amounting to fault as judged by, at a minimum, a negligence standard; and

(d) either causing special harm or constituting defamation per se".

The Appellate Division, however, noted:

1. "An allegedly defamatory statement is subject to a qualified privilege when it is fairly made by a person in the discharge of some public or private duty, legal or moral, or in the conduct of his [or her] own affairs, in a matter where his [or her] interest is concerned", citing Braunstein v Day, 195 AD3d at 589-590 [internal quotation marks omitted]", see Stega v New York Downtown Hosp., 31 NY3d 661; and

2. A "common interest" privilege "extends to a communication made by one person to another upon a subject in which both have an interest", citing Liberman v Gelstein, 80 NY2d 429.

The court then opined that to defeat this qualified privilege, "the plaintiff may show either common-law malice, i.e., spite or ill will, or may show actual malice, i.e., knowledge of falsehood of the statement or reckless disregard for the truth".

Here, said the court, Professor established, prima facie, "that the alleged defamatory statements she made in the course of the investigation into the allegations against the Plaintiff by [University] were entitled to a qualified common interest privilege." Further, opined the court, "Plaintiff failed to raise a triable issue of fact with respect to whether Professor's statements were motivated by either common-law malice or actual malice."

In addition, contrary to the Plaintiff's contention, the Appellate Division noted the Plaintiff did not demonstrate how further discovery might reveal the existence of material facts, currently within the exclusive control of Respondents', which would warrant the denial of the Respondents' motion for summary judgment.

Accordingly, the Appellate Division held "the Supreme Court properly granted the Respondents' motion for summary judgment dismissing the complaint.

Click HERE to access the Appellate Division's decision posted on the Internet.

Former assistant clerk alleged to have stolen nearly $4,000 from village

On August 9, 2023, State Comptroller Thomas P. DiNapoli, Chemung County District Attorney Weeden Wetmore and the New York State Police announced the arrest of Tammy Miele, former Assistant Clerk for the Village of Horseheads, for allegedly stealing nearly $4,000 from the Village.* The arrest was the result of a joint investigation between Comptroller DiNapoli’s Office, the Chemung County District Attorney’s Office, and the New York State Police.

“Ms. Miele allegedly used her position to defraud the Village of Horseheads for her personal gain** and altered Village records to cover her theft. My office’s investigation and our partnership with District Attorney Wetmore and the State Police have ensured that she will now be held accountable for her actions,” DiNapoli said. “I extend my thanks to District Attorney Wetmore and the State Police for helping my office combat public corruption through their continued partnership.”

New York State Police Acting Superintendent Steven A. Nigrelli said, “This arrest should serve as a reminder that those who choose to abuse their positions will be brought to justice. The arrest of this individual sends a strong message that we will not tolerate dishonest actions by those who use their position at the expense of the public. I thank the Comptroller’s Office and the Chemung County District Attorney’s Office for their commitment to investigating those who prey on the unsuspecting public for their own gain.”

Miele, 49, was charged with grand larceny and corrupting the government, both felonies.

She served as an assistant clerk for the Village from 2017 to 2022. During that time, she accepted cash payments for the Village, including accepting payments from multiple residents who wished to pay their water bills.

The joint investigation and forensic analysis revealed that Miele accepted residents’ cash payments but never deposited the cash into the Village’s bank account. Instead, she allegedly altered the Village’s accounting system to delete any balances owed by the taxpayer and pocketed the money. She is charged with stealing $3,548 from September of 2017 through September of 2022 through this scheme.

Additionally, the forensic analysis also determined that Miele paid her personal New York State Electric and Gas (NYSEG) bill with Village funds resulting in the Village paying over $450 of her bill.

Miele’s employment with the Village was terminated in September 2022.

Miele was arraigned before Judge Christopher Pelchar in the Village of Elmira Heights Court and is scheduled to appear again on September 6, 2023.

* N.B. The defendant is presumed innocent until proven guilty.

** As noted in previous NYPPL reports of such alleged acts of such misconduct, there is a term for such breaches of the public trust, "jobbery." Mirriam-Webster defines jobbery as "the improper use of public office or conduct of public business for private gain".